Cal Am water supply project faces another delay

Review of California American Water's proposed Peninsula water supply project will be extended by nearly a year, according to a ruling from a state Public Utilities Commission judge, raising further questions about whether the project will be finished by the December 2016 deadline.

In addition, Cal Am will be required to "seriously" consider any proposed public partnership, as well as contingency plans for a number of potential obstacles, involving its water supply project, according to the ruling.

Administrative law judge Gary Weatherford's ruling, issued Wednesday, sets a revised project review schedule that has final PUC action on Cal Am's project for late next year or early 2014, nearly a year after the firm's proposed schedule. The new schedule includes a cost workshop in December and sets local public participation hearings for Jan. 16 on the Peninsula.

Weatherford's ruling directs Cal Am to consider any public agency proposal for direct participation in the water supply project that is "feasible and sufficiently developed to allow implementation in a timely manner," provided the proposal is made by Oct. 1.

Weatherford also directed Cal Am to develop "reasonably detailed" contingency plans to address potential barriers that could delay or scuttle the project, and report on those plans by Nov. 1. The judge laid out the details of those plans and the relevant issues in a separate ruling issued Thursday.

At the same time, Weatherford rejected a bid by the Surfrider Foundation and others to hold off on key hearings until a draft environmental impact report is completed. But he affirmed that project alternatives would be considered as part of the EIR and would be identified during environmental review scoping meetings Oct. 24-25 in Monterey.

The proposed $400 million project calls for a Cal Am-owned desalination plant north of Marina combined with aquifer storage and recovery and groundwater recharge sources in partnership with the Monterey Peninsula Water Management District and the Monterey Peninsula Water Pollution Control Agency.

Schedule concerns

Cal Am spokeswoman Catherine Bowie said company officials agree with the judge on the need for a thorough project review, but she expressed concerns the new schedule could make it difficult to meet the 2016 deadline for developing a replacement water source ahead of a state-ordered cutback in pumping from the Carmel River. Bowie said company officials would make their concerns known to both the PUC and the state Water Resources Control Board.

"We are pleased the approval process is moving forward and agree with Judge Weatherford that measuring twice and cutting once is the best approach," Bowie said in a statement. "In terms of how the revised schedule could affect our ability to meet the (state's) cease and desist order, we do have concerns. "

Bowie said company officials have already been approached by members of the Monterey Peninsula Regional Water Authority about possible public partnership opportunities, and some ideas have been discussed. She pointed out that the water management district board is also considering a public role, and said Cal Am will continue engaging with both organizations.

Cal Am is required to file a report on any public agency participation proposals by Oct. 26.

Contingency plans

As for contingency plans, Bowie said Cal Am believes many of the elements in its proposed project already include them.

Weatherford's ruling requires Cal Am to come up with back-up plans to address potential barriers involving the availability of brackish source water in case the proposed slant test wells don't yield the hoped-for results or water rights issues aren't resolved; relocation of the desalination plant to a different site because of environmental, hydrological or geological issues; plant failure or periodic interruption; the availability of existing outfall facilities for brine disposal; a reduction in demand forecasts; and a delay in project completion beyond the 2016 deadline as a result of litigation or other reasons.

Cal Am's plans must include timelines, permitting milestones, cost estimates, financial impacts and pros and cons of the back-up plans.

With regard to the water rights issue, Weatherford wrote that the PUC is working "collaboratively" with the state water board, especially with regard to the legal feasibility of Cal Am's project.

In advance of the newly scheduled project cost workshop set for Dec. 11-13 at PUC headquarters in San Francisco, all parties have been advised to develop a joint financial model or optional models in conjunction with Cal Am to be used for computing the project's revenue requirement, or the amount of money needed to fund the project over the length of its financing term. The workshop will address project cost, the cost impacts of contingencies and related financial modeling.

Under the new schedule, a draft EIR would be finished and circulated for comment by July 1, 2013, and a final EIR published by Nov. 15 that year.

Meanwhile, PUC officials are expected to announce as soon as Friday whether the project will require a supplemental or subsequent EIR. Cal Am has requested the former, which would require significantly less study, while several organizations have called for the latter, which would require considerably more detail.

Qualifying for ballot

Also Thursday, the water management district's access to funding for its share of Cal Am's water supply project hit a speed bump after county elections officials announced that opponents of an approved water supply charge had gathered enough signatures on a petition to force the district board to either rescind its approval of the charge or submit it for a public vote.

County Registrar of Voters Linda Tulett reported that a 100 percent check of more than 4,800 signatures on a Monterey Peninsula Taxpayers Association-backed petition confirmed 4,136 valid signatures of registered voters, more than the 3,824 needed.

The charge, to be collected on bi-annual property tax bills, was designed to collect about $3.7 million per year to help pay for the district's efforts on key supply projects, including aquifer storage and recovery and groundwater recharge.

If the board chooses not to repeal the charge and seek voter approval, a special election would be required within 88 to 103 days of the board's decision.